As new and returning college students settle into their dorms this fall, those worried about their future job prospects can breathe a bit easier knowing they stand the best chances of landing the most lucrative positions after graduation.
Since 2010, the economy has added 6.6 million new jobs and the majority—2.9 million—are “good jobs,” which pay more than $53,000 per year, generally are full time, and most likely offer employment benefits, according to a new report from the Georgetown University Center on Education and the Workforce. Furthermore, workers with at least a bachelor’s degree secured 97 percent of those good jobs, according to Good Jobs Are Back: College Graduates Are First in Line.
“This has been a weak recovery, but the American job machine is working again for college graduates,” said Anthony Carnevale, director of the Center on Education and the Workforce.
Many media reports claim that growth in low-wage service jobs has propelled most of the nation’s economic recovery since the end of the Great Recession. But the Georgetown report finds the opposite is true.
“The prevailing media notion of recovery dominated by low-wage job growth is greatly overstated,” the report says. “The surge in hiring is not concentrated in dead-end McJobs. If anything, the surge is concentrated at the other end of the scale: in good, high-paying jobs that provide benefits.”
Most media accounts report on job growth trends within industries, which lump workers together based on the services or products a company produces, the report explains. That approach groups together everyone working in a specific industry—from a janitor to a chief executive officer—and assigns them the same average salary, regardless of an individual’s position or actual earnings. Consequently, industry analyses fail to distinguish between high- and low-wage opportunities within a given sector. By contrast, the Georgetown report examines growth trends among occupations, which classify workers based on specific activities performed on the job.
“[T]he skills required and the wages paid are vastly different among workers who are employed in the same industry, but in different occupations,” the report explains. “Sorting estimates by industry alone, we find, oversimplifies the results, and makes the many types of jobs being created across the economy appear to be lower in quality than they actually are.”
By those measures, “good” high-wage jobs are driving the nation’s economic recovery. Between 2010 and 2014, the economy added 2.9 million high-wage jobs, compared to 1.8 million low-wage jobs, which pay $32,000 or less per year. “Good jobs now have 1 million more workers than [at the start of the recession] in 2008, while low-wage jobs have 800,000 more workers,” according to the report. During that same time, the economy also added 1.9 million middle-wage jobs, which pay between $32,000 and $53,000 per year. The middle-wage tier is still 900,000 jobs short of its prerecession level, though, the report notes.
Having a college degree also offers a certain level of job security during turbulent economic times, according to the Georgetown report. Between 2008 and 2010, college-educated workers saw fewer job losses than workers without degrees, and they have seen greater job gains since that time, the report states. In fact, college-educated workers have gained jobs at each of the three income tiers, while individuals with a high school diploma or less have lost jobs at every level, as shown in the graph below from the report. (Click on the image for a larger version of the graph).
Even among low-wage jobs, the majority (61 percent) have gone to workers with an associate’s degree or some college, the report notes. Meanwhile, the number of middle- and low-wage jobs filled by individuals with a high school diploma or less declined by 280,000 and 159,000, respectively, between 2010 and 2014.
“The numbers are clear,” the report states, “postsecondary education is important for gaining access to job opportunities in the current economy, and job seekers with Bachelor’s [sic] degrees or higher have the best odds of securing good jobs.”
Most of the new good jobs are in managerial positions (1,781,000), STEM (science, technology, engineering, and math) occupations (881,000), and healthcare professional occupations (445,000). The majority of new good jobs also full time (86 percent), offer employer-provided health insurance (68 percent), and provide an employer-sponsored retirement plan (61 percent). Benefits often represent more than 30 percent of an employee’s total compensation (beyond salary), and consequently, contribute to a job’s overall quality, the report notes.
Although the Georgetown report offers promising news for current college students and recent college graduates, access to the best jobs varies along racial lines despite the economic recovery nationwide. As reported previously in Straight A’s, African Americans, and particularly African American men, still encounter multiple social, educational, economic, and environmental barriers that exacerbate the difficulties they traditionally have faced in the job market. Nationwide, the unemployment rate has declined substantially, stabilizing at 5.1 percent in August after peaking at 10 percent in the first few months after the recession, according to the U.S. Bureau of Labor Statistics. But the unemployment rate for African Americans has not recovered and increased slightly in August to 9.5 percent, more than twice the rate of whites. Meanwhile, the unemployment rate for Latinos was 6.6 percent in August, 2.2 percentage points higher than the unemployment rate for whites (4.4 percent). These figures highlight that although “good” jobs may be in large supply, access to those jobs remains out of reach for large segments of the population.
Good Jobs Are Back: College Graduates Are First in Line is available at https://cew.georgetown.edu/cew-reports/goodjobsareback/.